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Has Microsoft cloud strategy evolved?

Microsoft is trying to lead customers to the cloud with hybrid offerings, such as Microsoft Dynamics CRM. But will that succeed?

Increasingly, moving business processes to the cloud makes sense for IT shops. At the 2015 Microsoft Convergence conference in Atlanta, CRM and ERP users gathered to share results and discuss the future of the platforms. But while many businesses are paving their way to the cloud, others are reluctant.

Questions still remain about Microsoft's cloud roadmap: Microsoft's cloud-based licensing is confusing, for one. So too, the company took its time in committing its own products to the cloud. There are signs that users are warmingto the company's cloud strategy, but in many cases, users want hybrid options.

SearchCRM sat down with Dave Nelson, senior vice president and CRM lead at Avanade, an IT services company that implements Microsoft, to discuss what users are saying about Microsoft's cloud, how the company fares against the competition and what it has learned from its past.

"It's not about these individual products anymore," Nelson said. "It's about … bringing in the best combination of [technology]."

How has the Microsoft cloud strategy evolved to where it is today?

Dave Nelson: essentially created cloud computing [for CRM] -- they certainly brought it mainstream. Microsoft was a laggard [in cloud]. Similar to Oracle, Microsoft used to have a slimmed-down version of their on-premises solution as their cloud offering.

Over the last two years, we've seen a significant change in Microsoft's philosophy and stated strategy for cloud. They are trying to make 'cloud-first, mobile-first' a reality. All the new enhancements to Dynamics CRM are being deployed in the cloud version first and then being made available in the on-premises version.

How are users reacting to Microsoft's cloud offerings?

Dave Nelson Dave Nelson

Nelson: Users select on-premises software for some pretty legitimate reasons: Maybe they have sovereignty or personal information issues, such as in industries like healthcare or financial services, which have tended to lag in cloud adoption. Is Microsoft convincing users to move to the cloud when they didn't deploy to the cloud in the first place? Time will tell.

The other thing we've seen with Microsoft is this hybrid model, where you can have a part on-premises … and some of your elements in the cloud … and the customer never knows [the difference].

How has Microsoft's strategy toward its Dynamics CRM platform changed?

Nelson: When Microsoft Dynamics CRM first came out, Microsoft said, 'Here's our product. Here are the functions and features. We think it can solve a lot of your problems, but you have to figure out which ones it solves.'

Now, I think there is a much greater recognition that it's about understanding what customers are trying to accomplish, what they're trying to get done every day -- whether it's engaging with customers, being more operationally efficient in the supply chain, being more compliant in a regulatory environment -- and how they collaboratively find a solution for [customers'] problems.

How has the shift in cloud adoption among users changed Microsoft's strategy?

Nelson: One of the advantages that Microsoft had, historically, was that you can deploy it in the cloud and move it to your old on-premises [system], or vice versa, depending on the customizations. It could operate in a pure public cloud, pure private cloud, hybrid or on-premises models. That made it attractive to risk-averse companies and was a chief selling point against Salesforce. [Salespeople would say to buyers,] 'Do you want your data in a single instance, mixed with everyone else's?' It was a nice opportunity to instill some [fear, uncertainty and doubt].

I think that advantage is still there, but two things have happened: The cloud has become so pervasive that some of the initial fears over data security or performance are going away and we're seeing more and more customers who said, 'No way, no how,' three or four years ago now saying they're willing to give it a try. I don't think the on-premises [system] is going to go away in the near term, but I think you'll find fewer and fewer objections to it.

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